The Super Savings Fund

So over the years I’ve realized that making things easier is often results in less frustration and more happiness.  The classic: KISS (keep it simple stupid). I used to be a control freak and watch every penny with my money, but over the years I’ve been easing up on my control freak tendencies.  For example, I’ve stopped balancing my cheque book weekly, now I just review my monthly statement for obvious errors.

My latest realization is I need to stop tracking so many sub-accounts in my savings.  Currently I track several sub-accounts including:

  • Christmas savings
  • Insurance savings (house, car, life)
  • Property Taxes
  • Heating fund (I self equalize my payments)
  • Emergency fund

Yet over the years I’ve noticed the account never runs out of money as a whole.  Everything is spaced out during the year that the account always has a healthy balance into it.  So I’ve decided to give up some more control over things that don’t matter that much and create the super saving fund.  It will have one balance and replace all of the above sub accounts into one.  I will also then put in an automatic savings transfer to avoid having to rebalance the sub funds monthly.

I will still track the invoive amounts of what I spend for each old sub account so I can review if the monthly contributions are enough annually, but otherwise I won’t be looking at it on a monthly basis.  In addition, this means if I’m over saving I just end up with a larger emergency fund which I can remove any excess from on an annual basis.

Overall this should makes things simpler and reduce my time looking at numbers.  How about you? Do you keep any sub-accounts in savings or just mash it all together?  Why?

6 thoughts on “The Super Savings Fund”

  1. I had actually just heard about the “subaccounts” savings account method this past week, and thought it was a nifty idea. I’d never done anything like that, and I think it would really help me focus on the things that are expected yet I’m rarely prepared for (holiday gifts, car maintenance, property taxes, etc).
    It’s interesting to see you moving away form this method, and it really underscores that what might help you at one stage of the wealth journey might start to hinder you further down the line, and that you continually have to reassess your actions to make sure they are right for you at the current time.

  2. I have a similar strategy of just having a main savings account but actually I would prefer to track them separately if it was easier to manage.

    Ideally I think banks should allow you to create virtual sub-accounts off of one main account so it would be effortless to track with no additional costs or much effort.

  3. I just use one high interest savings account in which each month a sum (insurance, christmas, taxes, etc.)is automatically transfered into this account. This way, I am never looking to scrounge up money for the annual expense type things. Usually there is a little extra in one area, which could cover any additional expenses not accounted for. I will usually analyse the amounts in Jan. of each year to make sure that the amounts budgeted for are enough to cover the expected cost for that year.

  4. Caitlin,

    Sub accounts can be useful to get a hold of your more yearly type sending. I know I did like them to start, but now I know I won’t run out of cash in that account they are just becoming a pain.

    Jordan,

    They could, but how do you divide up the interest? Do they have to calculate it for each sub account? I suppose it really isn’t much more math, but the banks aren’t know for being user friendly.

    Brew,

    Exactly what I want to do. Thanks!

    Tim

  5. All accounts joint:
    Chequing account (paycheques and bills). Try to keep at $1000.
    Primary savings account (excess monthly cash flow goes to this large savings buffer for job loss, travel, house repairs).
    Secondary savings account (car savings fund. Siphons $300/month off the primary savings account. In 3 years, will have enough to buy a used vehicle with cash).

    We are currently continuing to build up our cash reserves. After a certain threshold (projected for August), excess cashflow will then be directed to the mortgage.

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